Analysis

Qatar Leads Gulf Region in Economic Reforms

Qatar has developed innovative policies in the face of an illegal economic blockade that resulted in immense economic feats from “the largest bovine airlift” to an accelerated diversification of the small Gulf state’s LNG-reliant economy.

Qatar has excelled in the face of the illegal blockade by using high state revenues from its natural gas exports. Qatar considers domestic economic policy inextricably linked to national defense. At the start of the illegal blockade, Qatar suffered from a massive shortage of popular foodstuffs – which it used to mainly import from siege nations, Saudi Arabia and the United Arab Emirates. After introducing short term measures to replenish domestic stocks, the nation accelerated its drive to achieve self-sufficiency.

However, this is not the only policy measure the state has taken. Qatar has also instituted liberal economic reforms that have set a standard in the region, and that neighboring states are adapting. Qatar passed landmark legislation in August 2017 that allows for the creation of a permanent resident status, which has the potential of fundamentally changing Gulf state societal dynamic. Furthermore, Qatar is the first nation in the Gulf that has instituted such reforms. Those who meet the requirements of obtaining permanent residency will be able to access the same standards of education, healthcare, property, and ability to run businesses within the nation.

Historically, Qatar, like other gulf states, awarded citizenship rights only to its indigenous populations. This change will further open up Qatar’s economy to new talent that held resident status as a prerequisite to employment and will further retain already existing talent employed in Qatar. The nation, and the Gulf region as a whole, suffer from a shortage of highly skilled domestic workers due to their small populations and this law is expected to ease the market.

This policy is now complemented further by earlier reforms, such as lifting restrictions on foreign ownership. Previously, Qatar allowed foreign ownership of company assets only up to 49%. The new law, which is set to be enacted in the coming weeks, will allow overseas investors to own 100% of a business or asset, further enticing new investment. This legislation breaks from past traditions as it will also allow for enhanced foreign investment in previously restricted industries such as petroleum and natural gas production.

The Qatar-America Institute provides information on the U.S.-Qatari strategic relationship in an effort to enhance the vital partnership between Washington, D.C. and Doha, as well as the enduring friendship among the Qatari and American people.